Formal:
* Que faites-vous? (This is the most formal way to ask)
Informal:
* Qu'est-ce que tu fais? (This is the most common way to ask in informal situations)
* Tu fais quoi? (This is even more informal and might be used between friends)
* Quoi de neuf? (This literally means "What's new?" but is used to ask "What are you doing?")
* T'es en train de quoi? (This is very informal and means "What are you in the process of doing?")
Example conversation:
Friend: Salut! Qu'est-ce que tu fais?
You: Je regarde un film. Et toi?
Friend: Je suis en train de préparer le dîner.
This translates to:
Friend: Hi! What are you doing?
You: I'm watching a movie. What about you?
Friend: I'm making dinner.
Remember to choose the appropriate phrase based on the person you are talking to and the situation.